AUGUST 2017 ADDRESSING POVERTY THROUGH MULTI-SECTOR INVESTMENTS IN THE CUBANGO-OKAVANGO RIVER BASIN The Multi-Sector Investment Opportunities Analysis (MSIOA) is part of a systematic strategy by the Permanent Okavango River Basin Water Commission (OKACOM) to assist the member states in achieving socially just, economically prosperous, and environmentally healthy development of the Cubango-Okavango River Basin (CORB). This is part of an effort to define a Sustainable and Equitable Climate Resilient Investment Program among the member states to address development challenges within the basin. • The Cubango-Okavango River Basin is one of the world’s • The MSIOA identified basin development scenarios most unique, near pristine, free-flowing rivers and central within potential economic, social justice, environmental, to sustainable economic development within the arid and climate resilient trajectories to the year 2040. These landscapes of southern Africa. The basin’s complex flood scenarios were aligned with the OKACOM Shared Vision, pulse cycle supports local communities and sustains a national development objectives, and investment plans to rich and unique biodiversity that make it a wetland of outline a series of options for joint actions within a desired international importance and a World Heritage Site. and shared ‘development space’. • Risks associated with persistent poverty among the member • The joint actions identified through the MSIOA inform the states (Angola, Botswana, and Namibia) present the single Sustainable and Equitable Climate Resilient Investment biggest threat to the long-term sustainability of the system. Program. The joint actions are structured around three However, the commitments to peace and prosperity among target areas: the riparian states and the broader efforts of the Southern – Climate-Resilient Livelihoods Enhancement Program African Development Community to facilitate greater regional – Enabling Basin-Wide Ecotourism in the Okavango integration provide prospects for increasing development. River Basin Program – Cooperative Infrastructure Development Program • The MSIOA builds on a long history of cooperation among the member states of the Cubango-Okavango River Basin. • Implementation of the joint actions in the three proposed The MSIOA is intended to assist decision makers in pursuing programs requires an estimated US$900 million, a review investments in the basin to address poverty, while preserving of the existing institutional arrangements, and would the unique ecology and reinforcing cooperation. The MSIOA support the establishment of a dedicated endowment fund. builds on the Transboundary Diagnostic Analysis and the Financing options include global public funds, such as the Strategic Action Plan for the Basin. Green Climate Fund, a framework for facilitating private sector investments, and a road map for joint development of large-scale infrastructure. These are intended to support long-term investments by shifting away from short-term project financing toward longer-term sustainable financing OKACOM A N B FIGURE 1. EVOLUTION OF THE CONCEPTUAL FRAMEWORK FOR THE SUSTAINABLE AND EQUITABLE CLIMATE RESILIENT INVESTMENT PROGRAM IN THE CUBANGO-OKAVANGO RIVER BASIN Consultation Foundation Context Informs Underpins FOUNDATION VISIONING OPTIONS INVESTMENT OUTCOMES & CONSULTATIVE PHASE PHASE ANALYSIS PHASE EVALUATION • Establishment • Trust building • Vision • Development • No regret project • Poverty • Communication • Collaboration • Mission objectives defined implementation reduction • Trust building • TDA & SAP • Values • Identification of • Complex project • Water & food • Collaboration • “Development • Principles investments preparation security • Information Space” • Cooperative • Development of • Development of • Ecosystem • Planning • Framing the model models models goods & services strategy • Roadmap • Validation of • Project scenarios • Employment & models agreed wealth creation • Project scenarios • Sustainable long- • Climate resilience agreed term investment • Equity financing Better outcomes through cooperative development Dialogue Sharing Aligning Cooperative Sharing and more efficient use of Information Strategies Actions Benefits available water resources streams. FIGURE 2. POVERTY DISTRIBUTION WITHIN THE PROJECT OVERVIEW CUBANGO-OKAVANGO RIVER BASIN MEMBER STATES. The Cubango-Okavango River Basin is one of the world’s most unique wetland environments and central to securing sustainable development within the arid landscapes that characterize the region. The distinctive hydrology creates a globally renowned LUANDA but fragile ecosystem that is sensitive to hydrological, climatic, ^ and biological changes. The Okavango delta is home to some of the world’s most endangered species of large mammals and ANGOLA Poverty provides the basis for a rich and vibrant high-value nature-based (% poor) tourism industry. This irreplaceable ecosystem also has significant 0 - 10 11 - 21 cultural value and sustains the largely natural resource-dependent ! H 22 - 30 31 - 40 MENONGUE livelihoods of people living along the river. The river is globally 41 - 60 recognized as an international public good as well as a wetland 61 - 80 81 - 88 of international importance under the Ramsar Convention and a ! H RUNDU United Nations Educational, Scientific, and Cultural Organization GROOTFONTEIN (UNESCO) World Heritage Site. ! H MAUN ! H GWETA ! H TUTUME ! H GHANZI ! H The environmental integrity and long-term protection of the ! H ORAPA WINDHOEK ^ basin depends on addressing the underlying drivers of poverty. NAMIBIA Accelerated environmental changes in the basin are largely BOTSWANA GABORONE ^ driven by four factors—population dynamics, land use change, poverty, and climate change—leading to deterioration in water quality, changes in the flood pulse, and diminishing biota. The near pristine nature of the basin is a product of the relatively low 0 : 250 500 Km. level of economic development within the Cubango-Okavango River Basin. This reflects a complex geopolitical history and the fact that the basin populations are remote relative to the countries’ capital cities and main centers of economic activity. This asymmetry is reflected in the income inequality within These models build on research conducted over the past 20 years each of the middle-income member states and in the social under various cooperative endeavors. National investments were development indicators that are lower than the national figures. assessed within a cooperative context that included information As a result, the risks associated with persistent poverty present from existing strategy plans and research. The MSIOA was an the single biggest threat to the long-term sustainability of the iterative process during which a range of stakeholders from various Cubango-Okavango River Basin. ministries in each of the member states were consulted about potential opportunities and sector plans along with the realization The MSIOA, financed by the multi-door trust fund for and distribution of derived benefits. In addition, the three member Cooperation in International waters (CIWA), provides the tools states and various partners held substantive discussions around to explore different development pathways that meet national strengthening OKACOM to realize the basin’s Shared Vision. development and poverty reduction objectives while striving to sustain the basin’s ecosystem services and the delta’s global The MSIOA was complemented through a series of parallel value. The commitments to peace and prosperity among the activities that included a network map of stakeholders and member states and the broader efforts of the Southern African an assessment of the benefits derived from cooperation. Development Community to facilitate greater regional integration These were developed through consultative mechanisms and provide the prospects for increasing development. The three cooperation with a range of stakeholders within the basin and cooperative investment programs —Climate-Resilient Livelihoods the member states, as well as development partners, including Enhancement, Enabling Basin-wide Ecotourism, and Cooperative the U.K. Department for International Development (DFID), Infrastructure Development—are intended to address equity U.S. Agency for International Development (USAID), United concerns and environmental sustainability, provide economic Nations Development Programme (UNDP), Global Environment opportunity, and increase the benefits from irrigation and Facility (GEF), United Nations Economic Commission for hydropower to all three member states. Europe (UNECE), the European Commission (EC), and Swedish International Development Cooperation Agency (SIDA). An analysis of the numerous complex relationship pathways APPROACH between various stakeholders helped inform political economy considerations to identify risks and help formulate a strategy for In 1994, Angola, Botswana, and Namibia established OKACOM effective project implementation. A scenario analysis provided the to promote coordinated and sustainable water resources tools for exploring methods to foster more altruistic behaviors and management while addressing the legitimate social and address negative externalities to achieve cooperative benefits. economic needs of the three member states. With support The analysis assessed the costs and benefits of cooperative and from CIWA, and in close collaboration between OKACOM and joint investments compared with unilateral development within the World Bank, the MSIOA was used to explore development and beyond the Cubango-Okavango River Basin. The study also opportunities through applied modelling of the economics, accounted for different climate change scenarios by examining hydrology, and the environmental impacts of a range of the impact of changes in temperature and precipitation on the development options. basin development scenarios. FIGURE 3. NETWORK MAP DEVELOPED BY NEXT STEPS STAKEHOLDERS IN THE CUBANGO-OKAVANGO RIVER BASIN The tools developed through the MSIOA provide OKACOM with the requisite framework to be able to address the underlying drivers of poverty in the Cubango-Okavango River Basin. The tools and findings provide a mechanism to facilitate a negotiated process that can inform decision making within a robust framework. This allows the member states to identify the distribution of benefits and potential negative impacts associated with different investment options. The MSIOA identifies a series of illustrative joint actions to inform the formulation of a Sustainable and Equitable Climate Resilient Investment Program. These joint actions are aimed at consolidating the cooperative framework among the member states and addressing the underlying drivers that threaten the long-term sustainable development of the Cubango-Okavango River Basin. FIGURE 4. POTENTIAL URBAN, AGRICULTURAL, AND DAM The Climate-Resilient Livelihoods Enhancement DEVELOPMENTS Program provides a relatively short-term Mediterranean Sea intervention that can build on existing initiatives to provide quick returns in addressing the underlying SOUTHERN AFRICA CUBANGO–OKAVANGO RIVER BASIN URBAN ABSTRACTIONS AGRICULTURAL ABSTRACTIONS MARSHES SALT PANS drivers of poverty. These ‘no-regret’ measures can TRANSFER CANAL POTENTIAL HYDRO POWER PLANTS HIGHWAYS MAIN ROADS be used to demonstrate the proof of concept for CUBANGO-OKAVANGO RIVER BASIN INACTIVE RIVER BASIN SELECTED CITIES NATIONAL CAPITALS longer-term sustained initiatives under a dedicated endowment fund and a proposal is being prepared SUB BASIN BOUNDARIES INTERNATIONAL BOUNDARIES AT L A N T IC OC E A N 20°E CUBANGO-OKAVANGO 25°E RIVER BASIN for submission to the Green Climate Fund and for IN DIA N OC E A N further CIWA support. Chingar Cub The Enabling Basin-Wide Ecotourism Program ango Cuito Chitembo Cuvango provides an illustration of how OKACOM could Dam 11 MW Cutato Malobas Dam 40 MW facilitate the mobilization of private sector resources Kuvango Menongue ANGOLA by creating an appropriate enabling environment. Cuchi 15°S Cuito Dam 15°S 12 MW Guiding private sector investments in the tourism Cuito Cuanavale Mongu ZAMBIA LUSAKA Transfer to Caiundo Cuvelai Mucundi Dam C u i to sector through efforts to extend the distribution of 105 MW Cubango Nankova benefits would help consolidate the cooperative venture among the member states and create Cu ito Cu positive reinforcements for the sustainability of the ba ng o Cuangar Calai Kasane Livingstone Dirico Rundu system. Transaction advisory services specialized Shakawe Sepupa in tourism concessions could be implemented Tsumeb Okavango ZIMBABWE over the next two to three years in partnership with Delta ongoing initiatives such as the Kavango-Zambezi Grootfontein O k a va n g o 20°S Maun 20°S Otjiwarongo Omuramba Omatako Windhoek/CAN Transfer via Grootfontein Botletli Transfrontier Conservation Area (KAZA TFCA). go Makgadikgadi Okavan Pans A Cooperative Infrastructure Development Francistown Deception Pans Ghanzi Program, such as rescoping the Mucundi BOTSWANA WINDHOEK Gobabis Serowe Dam, can address development needs in the O k wa basin within a sustainable framework and with NAMIBIA the added advantage of consolidating the cooperative venture among the member states. GABORONE Careful design informed by sound scientific 25°S 25°S information and appropriate institutional oversight 0 50 100 Miles mechanisms can ensure sustained benefits for the three member states. Grant financing could be 0 50 100 Kilometers PRETORIA Johannesburg SOUTH AFRICA mobilized to support a transparent process around IBRD 42985 | AUGUST 2017 This map was produced by the Cartography Unit of the World Bank Group. The boundaries, colors, denominations and any other development of transboundary infrastructure. information shown on this map do not imply, on the part of the World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. 20°E 25°E Addressing the underlying drivers of poverty within Substantial resources and sustained political commitment will the Cubango-Okavango River Basin is fundamental to securing be required to carry forward the recommendations and realize long-term sustainability of the basin’s global public goods and to the Shared Vision. The foundation of the Sustainable and achieving the objectives of the national development agendas with Equitable Climate Resilient Investment Program is estimated at each of the member states. Realizing the recommendations of the nearly US$1 billion. Such investments are essential to secure MSIOA requires an iterative process of robust interrogation by the the sustainable development of the Cubango-Okavango River member states, with important implications for the future evolution Basin within limits of acceptable change. of the institutional arrangements in the basin. The Cooperation in International Waters in Africa (CIWA) program is a multi-donor trust fund representing a partnership between the World Bank, its African partners, the European Commission, and the governments of Denmark, Norway, Sweden, the Netherlands, and the United Kingdom. CIWA supports riparian governments in Sub-Saharan Africa to unlock the potential for sustainable and inclusive growth, climate resilience, and poverty reduction by addressing constraints to cooperative management and development of international waters. www.worldbank.org/africa/ciwa